The boss of the firm behind household brands ranging from Dettol to Durex has had his pay slashed by £11m – but will still pocket £12.5m in salary and bonuses.

Rakesh Kapoor, chief executive of Reckitt Benckiser, was entitled to a pay packet worth £23.7m under the terms of his contract but the company said he had volunteered to give some of it back because the company’s recent performance had not been exceptional. The share price has tumbled from £81 to £59 in the last nine months.

The FTSE 100 firm’s remuneration committee, which sets the pay of its executives, decided he should hand back half of his long-term incentive pay, a bonus reflecting performance between 2014 and 2017.

The decision, which cost Kapoor £11m, followed conversations with Reckitt Benckiser shareholders, some of whom expressed concern that the company’s pay policy permits excessive payouts.

The remuneration committee is also thought to have taken public opinion into account, following recent outcry over £110m handed to the boss of housebuilder Persimmon, a deal described as obscene by Liberal Democrat leader Vince Cable.

Mary Harris, who has been reviewing Reckitt’s pay policy since becoming remuneration committee chair in November 2017, said: “At RB we pay for performance.

“Although shareholders enjoyed £16bn in value creation over the period, which demonstrates our performance culture, we recognised that 2017 was a challenging year.

“The CEO volunteered a cut to the vesting outcomes as the committee deemed fit. Based on the committee’s rigorous evaluation of performance in the round and alignment of pay outcomes, we then exercised our discretion to reduce the vesting outcome.”

Harris is preparing to overhaul the company’s executive pay structure after sounding out shareholders during a two-day roadshow after taking the position. While next year’s bonus will be calculated under the same terms, the maximum pot available to the company’s executives after that is expected to fall.

Reckitt has a history of attracting criticism for high pay deals, with Kapoor’s predecessor Bart Becht coming under fire in 2010 over a pay-and-shares deal worth more than £90m.

Stefan Stern, director of the remuneration thinktank High Pay Centre, said: “In a way it’s encouraging if both the board and the chief executive are recognising that the potential payout was far too big.

“There’s a glimmer of reality dawning in this otherwise dark world of excessive pay. It does also reveal the fact that the contract he was on, and these elaborate and pseudo-sophisticated pay contracts are hopelessly flawed if, when you tap all the numbers in and hit return, it comes up with a number that’s ridiculous.”

Kapoor was entitled to a pay-and-bonus deal worth £23.7m based on growth in the company’s earnings per share of more than 10% over the three years from 2014 to 2017.

But the company’s recent poor share price performance is thought to have been a key factor in convincing Kapoor that he could not accept the full sum.

Shares in Reckitt, which also makes Nurofen, Clearasil and Veet, have fallen from £68 at the beginning of 2017 to less than £60 on Wednesday, the day the pay figure was released.

The decline follows a difficult year for Reckitt when it was hit by sluggish market conditions as well as several factors specific to the company that led to it undershooting profit forecasts.